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The Valuation of Goodison Park

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I was just reflecting on the bickering that's going on between the pro-Kirkby and the anti-Kirkby camps and all those in between who don't know whether to trust the Everton Board of Directors or not.

Apparently Goodison Park is mortgaged to the tune of £15M and is reportedly worth £13M for redevleopment.

I wanted to ask all parties if we were starting with the funds available to the club today and were offered Goodison Park for £13M or Kirkby for £130M (or even £78M) which they would opt for and why?
Jay Harris, Liverpool     Posted 15/05/2008 at 15:09:03

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Michael Kenrick
Oh dear... Jay, my hope for this forum is to at least Keep It Real. There's enough debate and confusion over our perceptions of the real issues related to 'Destinaton Kirkby'... I have to ask ? is there any real benefit to inventing some hypothetical comparison that is not actually relevant?

If you really want to phrase it like this, surely the choice is between £78M for Destination Kirkby and £150M (or whatever the figure is) to redevelop Goodison Park.

But even that is not the whole story. Perhaps it should be the net debt we are left with after the completion of either option. Can anyone provide those numbers? From all I have read and heard, the figure for redevloping GP is substantially larger than for moving to DK. Which is the Board's primary (or only?) justification. Or have I got it wrong?

Jay Harris
1   Posted 15/05/2008 at 16:47:13

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Michael
to answer your question.
I think Tom Hughes and other engineers with far superior knowledge on the subject than most of us came up with something like this:

To redevelop Park end adding an extra tier to increase capacity by 7000 seats - £10-15 million.

To redevelop Bullens Road to create corporate hospitality suites and high standard of facilities increasing capacity by 5000 with no restricted views - £20-35 miilion (depending on Buying the school )


My question had more to do with relative values.

E.g. If you were looking for a new house and had a choice of 4 bed home that was in need of a facelift but was in the area you preferred but you could have a brand new 5 bed home in a slightly less desirable location and you were strapped for cash.

Would you pay 10 times the cost of the 4 bed run down home or buy the 4 bed home,give it a lick of paint and do it up as you could afford it.
Barry Scott
2   Posted 15/05/2008 at 16:57:59

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I believe you have it slightly wrong Michael.

Goodison Park could be redeveloped on a piecemeal basis meaning we could redevelop it in stages as when we can afford it.

It’s certainly the safer option when some financial analysts are predicting the first recession in this country for 20 years.

The houses behind Bullens Road and on the south side of Gwladys Street could be bought for less than £10million giving the architect’s a lot of room for development ideas.
Michael Hunt
3   Posted 15/05/2008 at 17:23:26

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I believe the ground move is a very, very important issue for our great, great club. That said, is it not futile for US to debate such things when Destination Kirkby is well and truly a long way down the path already: Essentially, planning permission could be granted shortly and Destination Kirkby could become a ’done deal’ already with the physical reality in place within just 24 months or so. Scarily, that is only around twice as long ago as the ballot was afoot (which seems very recent in my mind!)
My own take is that at the end of the day, the Board are the custodians with power and we just have to put our faith in them...(however hard that may be given repeated failures to deliver expected outcomes in the past, Fortress Fund, NTL, Kings Dock etc!)
Dave Wilson
4   Posted 15/05/2008 at 19:38:41

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GP was glorious on Sunday, the noise was incredible, I could hardly believe how animated all sections of the ground were, each song swirled around the place, The Park End every bit a match for Street End, the kids below in the Enclosure jumping on their seats, the blues in the Paddock were clapping and singing ? in between rising as one to vent their customary collective anger at something the rest of us had missed. The Geordies played their part too, giving their team tremendous support.

I went to every prem ground last season but I sat there thinking, on days like this, none of them come anywhere near to creating this very special atmosphere. Leaving the old lady without exhausting every possibilty of redeveloping her would be a huge mistake. Leaving to go to Kirkby at an even greater cost, well that would be criminal.

Peter Fearon
5   Posted 15/05/2008 at 19:54:21

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Perhaps the real question is why Goodison Park is worth only £13 million when it is going to cost £130 million to replace it - and in a suburban wilderness. The fact is that just about none of the numbers bandied about regarding this new stadium make much sense. Perhaps the one that makes the least sense is the idea that some corporation is going to pay £25 million up front for the naming rights to a self-consciously second-rate stadium in one of the most economically and socially blighted communities in the North West. That is not going to happen in a recession. What is more likely is that some company might pay £2 million a year over the next ten years for those rights - a diminishing value in real terms - which will leave us borrowing a lot of money at usurious interest rates.
Andy MacFarlane
6   Posted 15/05/2008 at 21:19:01

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Jay, "If you were looking for a new house and had a choice of 4 bed home that was in need of a facelift but was in the area you preferred but you could have a brand new 5 bed home in a slightly less desirable location and you were strapped for cash.

Would you pay 10 times the cost of the 4 bed run down home or buy the 4 bed home,give it a lick of paint and do it up as you could afford it."

A good argument, mate, but what if, to use your analogy, you already had a mortgage on your 4 bedroomed house, and the only way you could keep up the mortgage was to continue renting it out. Every time you scraped together the money to "do up the house" you had to get rid of the tenant while the work is being done - so no income, and huge mortgage arrears - risk of repossession. Not quite so clear cut, is it?
Andy Fearns
7   Posted 15/05/2008 at 22:23:22

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"Perhaps the one that makes the least sense is the idea that some corporation is going to pay £25 million up front for the naming rights to a self-consciously second-rate stadium in one of the most economically and socially blighted communities in the North West."

They won?t be arsed about where the stadium is. all they will care about is when Everton are talked about, across the world, the ground will be referred to as the sponsor's name. That is what they are paying for. It is what BTCellnet paid for at Boro, it?s what Emirates Airlines paid for at Arsenal etc etc. That's why I think we will get the £60mill.

Jay Harris
8   Posted 15/05/2008 at 23:13:57

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Andy Fearns
Do you know what the naming rights deals were for those 2 stadiums:
BORO:
When first opened, the name was amended to Cellnet Riverside Stadium (and then BT Cellnet Riverside Stadium) as part of a £3 million sponsorship deal with Cellnet, but this deal ended after the 2001-02 season[3].
I.e. 6 years at £3 million per year

ARSENAL
£4.5 million a year for 17 years

both deals included shirt sponsorship for which we currently get £2.7 million a year for 3 years from Chang.

Nobody has ever paid up front for naming rights and taking the shirt sponsorship separately as it wouldn't matter where we played we will be lucky to get £2.5 million a year for 10 years.

And there is nothing to stop us renaming GP and getting naming rights on that.
Davey Militwitch
9   Posted 15/05/2008 at 23:20:40

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The amusing uncertainty filtering out today from across the park made me think.........

What about a ground share?

Everton fans FOR the move do not want us to be left behind in the race to build a home that we can be proud of in terms of facilities.

Evertonians AGAINST the move do not want the crippling debt or to move to a supermarket carpark with awful transport links.

We all want a world class stadium.
We all want progress.
We all want to be able to get easily to and from our home games without the headaches.
We all want to be remembered as the first football team born out of Liverpool.

My answer to this?

Build a world class stadium WITH Liverpool.

I understand this may have caused a few of you to vomit over your keyboards, but just take ten seconds to think about it.
Is it such a bad thing to do?
I know It has been proposed many times before, but I don’t think it has been given enough consideration.
Both sides would not have the massive debt to shoulder on its own. Both sides would benefit from the location. Both sides could conceivably close the financial gap on the top 3.

To me it makes sense...what about you?
Ciaran Duff
10   Posted 16/05/2008 at 00:40:41

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Davey,

I think when the idea of a groundshare with LFC has been touted before many Evertonians including the board were willing to consider it. I too thought it was a good idea. However, LFC basically dismissed it.
Looking at what is going on now at LFC, then its probably a good thing that we didn’t get involved. Apart from all the politics going on, the cost of the stadium keeps growing. The current price tag would be £350M!! Assuming we went 50-50 then that would cost us £175M. There is no way we can afford that type of money.
Dick Fearon
11   Posted 16/05/2008 at 00:07:44

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Talking hypotheticals and wishing to impress potential investors or new signings and hoping they do not notice in passing your near neighbours palatial ultra modern home you bring them to a backyard decrepit old wreck that is undergoing a piecemeal reconstruction.
To divert your visitors minds from the neighbours palace you can impress them with a wonderful history of the old place.
I reckon that scenario will open wallets and get the ink flowing.
Meanwhile, back in the real world:
Paul Kish
12   Posted 16/05/2008 at 04:04:54

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Ok, this is an old chestnut, but I think it’s worth exploring in the current financial climate.

Given the sub-prime crisis and the restrictions that now appears to have emerged in banks prepared to lend money, why don’t EFC and Liverpool look at sharing a stadium??

If Liverpool, according to reports, are having problems raising the credit necessary to fund Stanley Park, what hope have we got of getting our share for Kirkby?

But more importantly, if Inter/AC Milan, Lazio/Roma, Bayern/1860 Munich can all share stadia for the life of me I can’t understand why Everton and Liverpool can’t.

Surely it’s the most logical step for both clubs.

Ok..you can all now shoot me down in flames..
Dave Wilson
13   Posted 16/05/2008 at 05:25:42

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City fans hanker for the old atmosphere of Main Rd, a club that regularly attracted 30,000 fans, even when they were in the third tier of English football cant even fill their "palatial ultra modern home"
Man u however redeveloped and went from strength to strength

Gooners dispite having a magnificent new arena, still look back with a dewy eyed nostagia to their spiritual home Highbury - funny that, they won everything until they moved -
Spurs stayed put and guess what ? they won more than Arsenal and they seem to have huge amouts of cash to spend on players too, Arsenal on the other hand, dont
Newcaslte redeveloped, they get 50,000 fo every game and seem to be linked with every player that becomes available, why ? because they can afford it.
Sunderland moved to a "palatial new modern" home . . . . and were instantly relegated
bit of a pattern developing here isnt there ?

We are constantly told the only way to improve and compete is to move,
can somebody please give me one fucking example of where that has proved to be the case ?
Jay Harris
14   Posted 16/05/2008 at 09:04:38

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Andy McFarland

"A good argument, mate, but what if, to use your analogy, you already had a mortgage on your 4 bedroomed house, and the only way you could keep up the mortgage was to continue renting it out. Every time you scraped together the money to "do up the house" you had to get rid of the tenant while the work is being done - so no income, and huge mortgage arrears - risk of repossession. Not quite so clear cut, is it?"

It has already been outlined on here by Tom Hughes and others how GP can be redeveloped mostly close season with minimum disruption and a minor reduction in capacity to 38000 (I think) for half a season.

If you study any of the redeveloped grounds - MAn U ,Newcastle etc. they were achieved with little disruption to their season and both hold over 55000.

Newcastle is also a smaller footprint than GP and is more landlocked.
Andy Callan
15   Posted 16/05/2008 at 14:17:16

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Just burn the fuckin place down, along with a load of the surrounding houses and build a new one on the same site.

Problem solved.
George Carpenter
16   Posted 16/05/2008 at 13:59:31

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I?ve never bought in to the idea that we need to move to a new stadium to be successful. Any potential signing is more interested in how successful the team is and not how old the ground is; if that was in case no player would?ve signed for Arsenal while they were at their old ground and the same can be said about Chelsea and Liverpool.

Arsenal moved grounds on the back of great success like-wise Liverpool. We need to be successful over a substantial period of time before we think of moving.

I didn?t vote for Kirkby for a number of reasons, the main ones being the move away from GP would be heart-breaking and moving out of the city would make it even worse, plus the design of the new stadium is dreadful ? it looks like a B&Q warehouse with "Everton" stuck on top, not the world-class stadium we were promised. If people who voted yes are happy with a mediocre stadium on a retail park, then good luck to them ? I want no part of it!

Jay Harris
17   Posted 16/05/2008 at 15:53:47

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George
I couldnt agree more.

The craze for building new stadiums came about because of the high level of grants that were available which is why we could have got Kings Dock for £30 million.

Now that those grants are gone and there are no Free dinners (despite what some blues fans think)there is absolutely ne economic sense in building a new stadium for £130 million plus and selling the old one for £13 million.

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